Fuel pricing expert backs CTA concerns about biodiesel mandate

June 14, 2011

OTTAWA, Ont. -- The Canadian Trucking Alliance (CTA) is bringing attention to claims by a petroleum pricing expert that support the group's contention that Canada's biodiesel mandate will drive up fuel prices.

June 14, 2011
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OTTAWA, Ont. — The Canadian Trucking Alliance (CTA) is bringing attention to claims by a petroleum pricing expert that support the group’s contention that Canada’s biodiesel mandate will drive up fuel prices.

Drawing comparisons to an ethanol mandate on gasoline introduced last year Michael Ervin, vice-president and director of consulting services with Kent Marketing Services, has said: “It is entirely likely that a more robust ethanol renewable fuel standard (10% for example) might lead to higher gasoline prices, particularly if existing incentives and tax exemptions were removed, since ethanol is a relatively expensive gasoline additive. The same may very well hold true for biodiesel, once better price/cost transparency is established for this product.”

The federal government’s own Regulatory Impact Analysis Statement on its proposed biodiesel mandate indicated pump prices could go up as a result of the July 1 biofuel requirement, the CTA pointed out. The net cost to taxpayers could be as high as $2.5 billion over the next 25 years.

David Bradley, president and CEO of the CTA says “it is important that gasoline and diesel fuel consumers be heard as well as the oil companies.” “Among our concerns,” he says, “is the impact that additives such as ethanol and biodiesel have on the price of fuel and what the impact of the removal of subsidies to the renewable fuel sector will be. We believe the renewable fuels sector is using frozen facts.”

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